Phillips-Van Heusen buys Calvin Klein

PanAmSat confirms offer for Eutelsat

By

LuisaBeltran

NEW YORK (CBS.MW) -- Phillips-Van Heusen Corp. inked a deal late Tuesday to acquire Calvin Klein Inc., the fashion house known for its pricey jeans and other apparel, for more than $400 million in cash and stock.

Phillips-Van Heusen said it would pay $400 million in cash and $30 million in stock and warrants. Mr. Klein will also receive an ongoing financial incentive based on future sales of the Calvin Klein brand. Apax Partners, a private equity firm, will also provide a $250 million investment in PVH convertible stock, PVH said in a statement.

The transaction is subject to regulatory review and is expected to close within 60 days.

Calvin Klein Inc.'s existing design and marketing organization will continue as a separate unit. Mr. Klein will retain a significant financial interest in the combined company and will be involved in strategic issues, including growth opportunities.

"We wanted to buy a great brand and that is exactly what we did," said PVH Chairman and Chief Executive Bruce Klatsky in a conference call.

The transaction is expected to be dilutive to PVH earnings in 2003 and be positive to annual earnings by 2004. Operating earnings in 2003 are expected to be $1 to $1.05 a share while 2004 earnings per share are seen growing annually by 15 to 20 percent.

New York-based PVH
PVH, +1.07%
is a leading maker of dress shirts under brands including Bass, Izod and Van Heusen. CEO Barry Schwartz and Mr. Klein founded Calvin Klein in 1968.

Phillips-Van Heusen beat out VF Corp., the maker of Lee and Wrangler jeans, for Calvin Klein, according to report in The Wall Street Journal said Tuesday.

A buyout of Calvin Klein would mark the latest episode of a designer getting swallowed up by a conglomerate. In April 2001, France's LVMH Moet Hennessy Louis Vuitton paid $243 million, or $10.75 a share, for Donna Karan International Inc., which had been a separate publicly traded company.

In a recent interview with CBS.MarketWatch.com, Donna Karan said the move to LVMH gave her brand more global reach and freed her up to focus more on fashion and less on quarterly results.

"The ability to turn something brand new, without that feeling that I've got to create by the quarter, as opposed to looking at the future with a longer vision -- it's a good thing," Karan said.

LVMH said Karan's business is expected to be profitable this year.

Tommy Hilfiger Corp.
TOM, +0.00%
which markets clothes and jeans worn by rappers and teenagers, and Polo Ralph Lauren
RL, +1.51%
with brands including Polo, Lauren and Club Monaco, are still publicly traded.

PanAmSat makes bid for Eutelsat

"We can confirm that PanAmSat met the deadline by Dec. 13 to have a proposal into Eutelsat," Chief Executive Joseph Wright told CBS.MarketWatch.com. He declined to give further information on the offer.

Last week, CBS.MarketWatch.com reported that PanAmSat, one of the world's top three global satellite operators, planned to bid more than $3 billion for Paris-based Eutelsat.

Rival Intelsat Ltd. said last week that it would also make a cash and equity odder for Eutelsat.

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